Barnes & Noble warned about the Christmas quarter a while back, so we knew things were heading south. Yet the numbers still have the power to shock. As a Nook owner, I am now starting to get that queasy Betamax feeling; Nook volumes actually declined year-on-year. The true horror here is that Nook revenues declined by more than 12% — a steeper slide than what B&N’s total sales showed. This means that combined digital content and Nook device sales are now shrinking faster than traditional hardcover and paperback sales.

. . . .

Barnes & Noble is the last national chain of book stores in America. And its eBook strategy simply isn’t working. This was the Christmas when the earlier collapse of the Borders chain should have boosted Barnes & Noble’s fortunes. Instead, Nook volumes declined and retail segment revenue crashed by 10.9% compared to the previous Christmas.

. . . .

It is now clear that Barnes & Noble is about to be demolished by Amazon.

Yup. B&N’s brick-and-mortar operation suffers from every one of the failings that made Borders go broke. Why should they have expected a different result?

As for the Nook, I am firmly convinced that their cavalier dismissal of all foreign markets (until they branched out a little while ago into the U.K. — too little, too late) made it impossible for them to compete with Amazon and Kobo, simply because they didn’t have the same economies of scale. Autarky is a poor model for a national economy even when the whole nation buys in: see Stalin and his ‘socialism in one country’. When a single business tries to do ‘capitalism in one country’, and everybody else is operating internationally, it’s a sure setup for failure.

it is, and when they expanded to the UK several of my writer pals and I had a long discussion about how they should have jumped internationally immediately instead of waiting this long.

There is a faint rumor going around that perhaps Apple will step in and take the nook on, but I haven’t heard anything else (this was months ago from someone who probably shouldn’t have been talking about it.

I don’t think there is very much B&N can do to keep from totally going *poof*, at least not where I am sitting right now.

It really doesn’t bother me. I have virtually NO sales through B&N as it is.

I see no reason why Apple would give two hollers in Hades about Nook. They don’t care about e-Ink, far as I know. They have tablets of their own, with the OS that re-defined tablet OSs. They have their own bookstore. They have no reason to get into the physical-book business. I’d say that rumor’s wild and wishful thinking on someone’s part.

Don’t worry.
Their death spiral still has two to tree years to run.
The Microsoft and Pearson money will tide them into next year and after that they still have 28% of Nook Media equity they can sell off to keep going.
Plenty of time for the sideshow to get interesting.
Next up: shareholder lawsuit.

It’s like they put every egg in the world into the Nook hardware, while paying no attention to all the other seemingly smaller stuff.

In multiple ways, they make it tough for indie publishers to use their platform. Things that pop to mind: dropping popular erotica titles’ rankings to make their best-seller lists look “cleaner.” Randomly republishing books that authors have chosen to unpublish. And is there any customer service aimed at indie publishers at all? So far as I hear, there isn’t even anyone checking the email over there. But indie sales are an important part of the market, now. B&N is so far from optimizing the income stream they could have from indie books … I just don’t get it.

Their search function is weak. I have to order my textbooks through B&N, and the experience always leaves me wanting to pull my hair out. You know how I do it? Go to Amazon, find the book, copy the ISBN, go to the B&N site, adjust for the fact that the B&N ISBN search field drops the last digit of the ISBN every time I paste it in …

Their customer-review system is ridiculous — all cluttered with meaningless IM garbage. Amazing how much flack Amazon has gotten for trying to police theirs. Well, look at the alternative.

Don’t they get it? They’re up against a competitor that makes excellent devices AND DOES EVERYTHING ELSE WELL, TOO.

I definitely agree about their search function, and as far as I know, there is no customer service for indies (never received any responses to my emails on all the PubIt errors I encountered, which has kept me from uploading to B&N direct).

Since I seldom see any sales through there, B&N disappearing won’t personally affect me. Their employees, on the other hand… =(

Yes. Those review guidelines haven’t changed — you’ve never been permitted to review a product in whose success/failure you have a financial interest. Now they’ve tightened enforcement of that rule, and many authors have had reviews deleted because they were sock-puppeting their own books or because they weren’t sock-puppeting but whatever auto-bot Amazon created to ferret out sock-puppets thought they were. There followed several alarmist articles in the mainstream media (I remember one in the Guardian in particular) that used these deletions to claim that Amazon had broadly disallowed authors from reviewing, but that’s not the case. If you’re reviewing a book in which you have no direct or indirect financial interest, you’re fine.

Becca’s right. I do the odd review when I like a book enough – my reviews definitely aren’t worthless garbage, but I’ll admit I don’t do them very often and only when I have something to say! – and I haven’t had any problems. Similarly, I have some reviews of my own novels on there that I really treasure. Thoughtful and interesting. But there have been a lot of complaints from people who have managed to rack up hundreds and hundreds of reviews for newly published indie books in the space of a few weeks (how?) that ‘their’ reviews are disappearing. I don’t mind Amazon tightening things up a bit, even if I lose one or two – although I haven’t yet, so far as I can see. But they trickle in very slowly!

I suspect Barnes & Noble may have been conflicted about The Nook Store competing with brick-and-mortar.

Whatever the cause, BN never did a very good job with The Nook Store. Yes, you could find tradpub bestsellers without a lot of problems, but for everything else, it was/is a disaster.

Becca isn’t the only reader who searches for books on Amazon in order to buy them online at BN. If you’re going to do e-commerce, you need to go all-in or the competition will eat you alive. If you’re going to go head-to-head with Amazon, you need to go triple-all-in because they’re the best competitor there is.

One more point I haven’t seen anywhere else is a downside of having a Nook sales station right at the front door in Barnes & Noble retail locations – If a retail customer buys a Nook and has a bad online experience with it, some of that dissatisfaction rubs off on Barnes & Noble’s overall brand equity. Every time they walk in the door at the store, they’re reminded of their disappointment/frustration/etc. with their Nook – not a good way to begin a retail shopping experience.

It’s true that one of the reasons I’m so mystified by B&N’s bad online operations is that I think of their physical stores as being run quite well — attractive, clean, well stocked, helpful workers, nice cafes, etc. Then you go online and think, “What’s this???”

Also, there seems to be a bunch of stuff out there on rooting one’s Nook reader so that it can be used to read…Kindle books! It really destroys the “give away the razor, sell the blades” strategy when people are SO unhappy with how you sell your blades that they’ll go to the trouble of completely reworking that razor so it will accept your competitor’s blades.

I rooted my Nook over a year ago. The whole Nook interface thing is like a layer you can get behind to reveal a tablet.
You can “root” a Kindle Fire, too, you download a program called getjar and after following the instructions you can read epub. But honestly the Nook is plugged in but I only use the Fire. Unfortunately since it doesn’t have a nice cover like my Nook Color does.

I got an answer back when they partially conflated one of my books with one of Meg Cabot’s with a similar name within an hour and it was fixed the next day. My experience is atypical but there is SOMEBODY reading the occasional publisher email.

I have a Nook, but did get a Kindle for Christmas because more and free books. I like my Nook, but hate that I can’t have Overdrive (to get library books directly without having to connect to a computer) without rooting the device. I think B&N membership should include Nook discounts or other benefits. And I think offering indie publishers features like KDP would help get more titles. Finally, like many old businesses, B&N wasn’t paying attention as the digital world evolved. And it doesn’t take advantage of easy marketing strategies. For example, when I search for a book online to see if it’s in my local store, why doesn’t the site offer other books that are available if the one I’m searching isn’t there? I bet many people would drive over to buy a similar book, if the one they wanted wasn’t onsite.

I can’t help feeling a little nostalgic. Not for B&N specifically, but for brick and mortar book stores in general. I was never one to enjoy shopping for clothes as I have no fashion sense whatsoever, but the prospect of hitting the bookstore at the mall was always an incentive to go shopping with my best friend–who loves/loved to shop. All those books in one place and the possibilities! Of course, now I get the same feeling when I log onto my Amazon account and look for a book.

It’s still not a complete replacement for the brick-and-mortar browsing experience, though, is it? Just the feel of being in a nice space with a bunch of like-minded people … online book shopping lacks that communal aspect. I’ll be very sad if B&N closes.

And, as an author, I’ll be worried. Amazon is awesome, but it should have competitors.

There’s one thing that Amazon will never replace in the brick-and-mortar experience: the taste of the owner, as reflected in the books offered.

I think fondly of one now-departed bookstore, where I knew I could go to look for something to read — nothing specific, just “something” in its most vague sense — & find it on their shelves. And I could knew to expect a certain flavor or species of book because the selection reflected the owner’s personality.

I miss that experience. I don’t get it at the remaining independent bookstore here in Portland — Powell’s, which was a brick-&-mortar Amazon before there was an Amazon. (IMHO, it has the best chance of competing with Amazon, unless its owner — who is the founder’s granddaughter — goes & screws up the business. Powell’s focusses on being a bookstore, having an extensive stock, & partners with Amazon when it makes business sense.) And I don’t get it at Amazon: my experience is little more than “do they have the title I want to buy”.

At neither place do I feel inclined to simply go & see what they recommend to me, since it will be based primarily on what the publisher’s representatives were pushing this month. I would like a place to browse where personal taste — both the good & bad sides — is present. And, of course, it matches my taste.

I know what you mean.
I had a favorite bookstore,once: MOONSTONE BOOKCELLARS in Washington DC. Nothing but SF&Fantasy from the US, Canada, and the UK. The foreign editions were key; entire series that were out of print in the US were on their shelves.
Borders and B&N put them out of business.
Times change, people’s habits change.
Now I get my SF fix direct from Baen, from Amazon, from Powells (for older, used books) all through the internet.
The MOONSTONE experience isn’t there, but then, I’m not 20 and on my first job either.
I “make do”.

Hi Geoff – don’t dismiss the power of the “Customers Also Bought” recommendations. They are NOT paid product placements. Start poking around and you might be very pleasantly surprised by where it takes you.

Well, when I get a price of $9.50 from Amazon, $11.50 from B&N’s website, and pay $15.00 for the same book in the store, I think I can see part of their problem. Add in that I’m 0-3 trying to upload my book to PubIt, and while I love the store, I’m not surprised that they are barely treading water.

Before we go too far with burying B&N, I’d like to point out that this commentary came from a tech news source, not a business news source.

I mean, yes, we’ve all seen some bad signs of things to come for B&N, but this article seems more like just more bravado commentary on information everybody already has than actual new information or insight. (Like the old “Apple’s going out of business!” stories that used to fly around.)

Although I admit that I am somewhat prejudiced against this article for the misuse of the word “gutted” in the headline. (Probably not the author’s choice, I admit.)

Gutting is something you do to something you control. A parent company guts a subsidiary, or a division. A congressman guts a bill. It means to pull out essential parts of the internal workings. Competitors can’t do that. They can demolish, destroy, starve, but they really can’t gut, until after they’ve won and they buy the company.

I don’t see how the business news is any more promising. Holiday brick-and-mortar sales down 3% not including the Nook business, and down 11% overall? There’s no retailer in the world who wouldn’t be answering some very tough questions under those circumstances, especially if they were already troubled, which Barnes & Noble is. To make it worse, the Nook was supposed to save Barnes & Noble–companies have been pumping money into B&N because of the alleged promise of the Nook. But it is failing in a market where its competitors are not, which means that the chances of any more big investors riding in to save the day are increasingly slim.

I didn’t say that business news was more promising (I said closer to the opposite in that I said that we’ve all seen bad signs): What I did say was that this guy is just opining. This source is not bringing any insight or even information beyond headlines we all see.

It’s legit for him to give his opinion, but we have to watch out for creating a feedback loop when we talk about such spin stories as if they were confirmation of our opinions rather than just one more bit of noise blowing in the wind. This is like when one of us do a blog post on the subject, not like a news story.

Why is anyone reading on a “uni-tasker” (as Alton Brown calls them) like a store-specific e-reader? My iThingy has the Kindle app on it, and the Nook app, and various other reading apps (although I confess the Kindle app is used 99.9% of the time while the “shelves” in the Nook app sit empty). I don’t shop at the B&N online store for the same reason as so many others. It’s just too difficult to find things.

E-ink. I read on a Kindle Keyboard because I much prefer the E-Ink screen. I got a really good deal on the model last year right after they introduced the Touch. I also find my monthly Amazon Prime book a nice perk although I wouldn’t have gone with the Kindle just for that. I am also tech savvy enough to buy books elsewhere and use Calibre to load them on my Kindle.

On the other hand, my iPhone is smaller and lighter than a Kindle even, and when I’m running the Kindle or iBooks apps, it doesn’t distract me from reading at all. And for me it was cheaper, because the readers are free apps on a device I already had anyway. Reading in sunlight I grant you, but when I’m out in the sun, reading is not what I want to be doing.

By the way, I find that the ‘Retina’ display makes a huge difference. No eyestrain at all, and far better contrast than I’ve seen on any e-ink device.

I’m not limited to using a single unit. I use iPhone, iPad, and Kindle depending on where I am and what I have with me. The iPhone is always available. The Kindle is better than the iPhone and fits in a jacket pocket better than the iPad. The iPad has the best reader apps and is my choice sitting in a chair at home. I don’t have a mini-iPad, but that could change the preference priorities.

I would be very sad to see B&N brick and mortar stores close. They offer us the one thing that Amazon doesn’t – a place to have book signings/readings. My local B&N has been very good to me. I am an indie author, and they have placed my children’s books on display in their store in a prominent position. I have done two book signings already, and will be doing another in spring. They have told me it’s their policy to support their local authors. I’ve tried to contact other mom & pop independent book stores to do signings, and have not even had a response from them. So as far as I’m concerned, I hope B&N sticks around a long time.

I don’t know how many of you have been in a B& N in a while but they are really depressing. There are no books!

I spent New Years Eve day trying to return a book that my hubby got as a gift. The first B&N I walked into was closing. It was it’s last day. There was one employee and the place was empty save two souls stocking up on bargain books. So I drove over to the only B&N I knew was still around because the community begged the owners of the mall to lower the lease to entice B&N to stay.

It was still there but a ghost of what it used to be. It has two floors. The bottom floor is a small sections of best sellers in the middle behind the Nook Display and surrounded by calendars, stationary, cards games and some travel and business books. Upstairs the Children’s section is still the same size but most of what used to be Romance and Mystery is now Young Adult. Literary fiction has shrunk to half. And instead of having a few books face out and the rest spine out, the vast majority are face out. Which means that they carry about one quarter of the books they used to carry. And no back list. Just the latest of the top names and that is about it. The employees are nice and you can get coffee or tea while you browse but there isn’t anything to browse. It’s depressing for those of us who remember what a great bookstore looks like. No wonder people prefer to buy online.

B&N’s problem isn’t Amazon. It’s B&N. And the Nook isn’t helping. Consumer Reports rated it the best ereader available this fall but that didn’t seem to help Christmas sales if this article is correct.

Well said. I’ve been in two different ones since Christmas, & your description could apply to either. (Even more depressing when one considers their B&M competition in this city is Powell’s Books — which appears to be doing quite well.)

The B&N around here has books — I think it may’ve even expanded its SF&F section recently… They have gobs of other stuff, yes, but it’s not taking over the store. The face-out stuff is the New Releases, which is pretty clever, actually.

That sounds like my local B&N. The only real downside with it (as opposed to customer service online, a different rant) is that it’s in the mall. It closes later than the mall on weekends, which means all the too young to drive teenagers whose parents have dumped them for the evening show up when the mall closes. They aren’t interested in books or reading. Instead they run through the store making all kinds of racket. And the store does little to discourage them.

Ours is holding down the corner of a strip mall, near the main local mall. I don’t know if it has any similar issues or not, since I am generally not there that late… >_> Probably not, though, since it’s a goodly walk from the Mall Proper, and the Cheap Stuff store is between it and the Mall Proper also. (And a movie theater, and some restaurants, etc.)

B&N always seemed to me to be a traditional book store that believed paper would always win out, but just scared enough of eBooks to invest ‘just enough’ to launch a reader and an eBook store.
The result is a half arsed job all around. And by continuing to pursue this strategy it looks likely that it will condemn both businesses to fail.

I have never had any issues with either my B&N store or my Nook. I don’t know if it’s just my tastes, but I read a lot of indie books and I never really have any issues finding anything. There’s very few books I have wanted to read that I couldn’t find because it wouldn’t show up in listings. I have a lot of indies show up in my “also bought with” section.

I don’t like Amazon’s store at all. I’ve tried it on the Kindle app on my phone, and I’d never buy a Kindle based on that.

I have one self-published book through Pubit, and I didn’t have any issues getting it through (though I had to submit it myself because it never showed up through Smashwords).

I never watch the stock price unless I’m looking to buy (or sell). What I watch are the financial data. B&N had declining profits for several years running, went into the red in 2011, and reduced its losses just slightly in 2012. Also, in 2012 it went into the red on operating cash flow. At that point, my principal question about the stock is whether or not to go short.

I agree it’s beneficial to watch the financial data. I’d include stock price in that. From the financial data, I expect the bookstores to be gone in a few years. They failed to sell themselves to Liberty, did manage an investment from Liberty, then created the digital company as a separate entity. Microsoft and Pearson both invested in the digital company, and B&N retains 75%. It will be interesting to see if they can do a managed withdrawal from paper books. It won’t be easy.

I am a little late to this conversation, but I would like to add a few things. The poor search capability in B&N’s online store must be a feature, not a bug. The store was designed to mimic their physical store. You take what is on offer or, if you insist, a surly search bot will make a half-hearted attempt to find a book you can precisely identify.

I expect Microsoft to take over the Nook customer list and Pearson to take the college bookstore business. I would love to see a Windows 8 dedicated ereader. That platform has a number of real advantages over the Linux and Android platforms, especially for typography.

Dang, that’s an awful store for you! The search-bots, er, employees at my B&N have always been great for looking for stuff for me, including going into the back and bringing out the Barbara Hamilton book that had apparently sold off the shelf.

Clearly B&N needs to get the manager of my local store and download his or her brain into a megacomputer to make a user-friendly site! (Because their online store just… meh.)